6 tips for dealing with debt stress

By UK CreditCards.com

Published: 12 October 2011

Financial worries and debt are common causes of stress and, if left unchecked,
can lead to a variety of problems, including depression, a breakdown in
relationships and anxiety, say experts.

However, by taking action against your debt, you can help keep money worries from taking over your life. Here's how to take control of your financial future and
reduce your stress.

1. Be honest and accept your debt.
The first thing you need to do in order to tackle your
debt and the money worries it brings you is to accept that you have debt.

Before
you are able to regain control of your finances and start on your road to recovery,
you need to open up and accept that your debt is a problem. More often than not,
debt creeps up on people over a long period of time and a few small slips can
easily escalate into something more serious.

2. Know that you're not alone.
Nearly half of UK consumers are concerned about their
debt, according to a recent study by the trade body for insolvency professionals, R3
-- a 7% increase from last year. Credit card debt seems to be the biggest cause
for concern, with 53% reporting
particular concern over their credit cards.

If you're currently battling significant debt, don't be too hard on yourself. Many Britons are dealing with the same thing.

3. Seek advice.
There are numerous charities and government bodies that provide individuals with free debt advice. If you would like to
speak to a professional about how to
move forward, ensure that the counsellor is with a registered charity and be wary of
companies asking for a fee.

4. Speak to your creditors.
They may be willing to set up a payment plan or reduced monthly payments if you
inform them of your financial situation.

Before you are able to regain control of your finances and start on your road to recovery, you need to open up and accept that your debt is a problem.

Ignoring your creditors, in contrast, will only encourage
them to continue hounding you for payments.

Speak to your creditors sooner rather
than later. That way, you are more likely to come to an arrangement that will allow you to start
paying back what you owe.

5.Create an action plan and a budget.
In order to know how much you can pay towards your debts
each month, you need to draw up a budget. This will let you know what your
income and outgoings are so you can create a plan to pay off your debts. The
Citizens Advice Bureau offers a step-by-step guide and budget sheet to help you do this.

If you do not have enough money coming in to cover your
outgoings, you have two options. You can either reduce the amount going out or
increase the amount coming in. This means that you might have to cut back on
some luxuries, reduce the cost of your day-to-day living or find another source
of income, such as a second job or
additional state benefits.

By talking to a credit counsellor at a charity such
as Citizens Advice or CCCS, you might find that you are eligible to receive
benefits, such as tax credits or a council tax benefit. Once you know how you
are going to fund paying off your debts, you can start working towards reducing
them.

6. Tackle your debt stress.
Now that have accepted your debt and started on a route
out of it, you need to consider how your money worries have impacted your mental health. Becoming stressed or
depressed about your financial situation is normal. However, there are actions
you can take to help you stay calm and relax in a difficult environment.

Make your health a priority. Eating a healthy and
balanced diet will ensure that your body and your mind are able to function
properly, whilst doing exercise can release endorphins and keep you
socialising. Professor David Richards, from mental health services research at
the University of Exeter, suggests that people with money worries get moving in
order help relieve stress. "Take up some type of exercise," suggested Richards
in an interview with NHS choices. "It can improve your mood if you're feeling
low."

Keep a routine. If you are unemployed or have been made
redundant, it can be very easy to slip out of a routine and spend the day
watching TV in your pyjamas. However, it is important that you keep to your
normal routine as much as possible. Get up at the same time, get dressed and
ensure you eat properly at meal times.

Stay in control. Once you have developed an action plan
and budget to help you get out of your credit card debt and avoid debt stress,
stay on track. Try to avoid thinking about what a big mess you are in, or
having negative thoughts about how you
will be stuck in debt. You have taken huge steps in regaining control of your
life and finances, so stay positive as you continue on your road to financial
recovery.

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